General market review and future prospects

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Garey Hunter
5 years ago
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3 Operating financial results We are pleased to present financial information of Zephyr Textiles Limited ("the Company") for the quarter ending September 30, During this period your Company's sales increased by 8.17%, amounting Rs million as compared to Rs million in corresponding period. Similarly, the gross profit increased by 46.69% amounting Rs million as compared to Rs million in corresponding period. Your company has earned an after tax profit of Rs million as compared to Rs million in the corresponding period. The increase in sales revenue is mainly due to increased sales prices as a result of high inflation rate prevailing in the country and increase in production capacity as compare to the corresponding period. Your company successfully managed to achieve targets with better marketing and financial strategy along with optimum product mix offered to the customers. Description September 30, 2013 September 30, 2012 Increased/ (Decreased) By % Sales - net 939,722, ,768, Gross Profit 106,091,448 72,322, Operating Profit for the period 78,058,200 46,953, Financial charges 51,735,267 36,455, Profit/(Loss) for the period before taxation 26,322,934 10,497, Taxation current (1,142,268) (2,217,448) (48.49) Profit/(Loss) for the period after taxation 25,180,666 8,280, Earning/(Loss) Per Share During the period under review, nothing has changed as far as economic conditions are concerned. The economy is badly suffering due to shortage of gas and power especially for textile industry which is the back bone of Pakistan's economy. The company earned handsome profit in the first quarter of financial year despite the rising input costs. The company is successful during last few years to improve operational and financial efficiency and able to reduce the gap between its current assets and current liabilities. Despite the shortage of working capital, the company managed to repay the outstanding debt amounting to Rs million and outstanding mark up amounting to Rs million to the lenders of the company. The increased overhead costs and shortages of gas and electricity severely affected the productivity and consequently competitiveness in the international as well as local market. The profitability picture does not truly reflect the underlying cash flow crisis. General market review and future prospects Today challenges affecting the textile industry of Pakistan for past few years still linger on. Increasing production costs due to rising energy prices and inadequate supply of gas and electricity are posing grave threat to textile sector of Pakistan. Future holds further challenges for the industry. At Zephyr Textiles Limited, our strategy is to minimize the negative impact of production losses to the maximum extent possible and increase our sales volumes and profit margins. To achieve growth targets, we are putting increased efforts and resources to diversify our product range and customer base. The company is planning to setup purchased / rental diesel generators to secure continuous availability of electricity in order to avoid expected production losses during coming winters.

4 Other matters We draw attention that The Bank of Punjab filed a suit against the company in the Honorable Lahore High Court, Lahore for recovery of its outstanding loans and murk up thereon aggregating Rs million. The Company was contesting the case. However, now both the parties had reached to an amicable out of court settlement by withdrawing the suits from the Honorable Lahore High Court, Lahore. The restructuring agreement had been executed between the parties and the Bank Of Punjab has withdrawn the case. Consequent to the withdrawal of said case the stay order against disbursement of dividend declared by the company for the year ended June 2011 due to suit filed by BOP in the Honorable Lahore High Court, Lahore has also been vacated. The said declared dividend will shortly be disbursed among the shareholders. Over the last three years the management has successfully negotiated the restructuring/rescheduling arrangements with its lenders and consequent to approval of submitted restructuring/rescheduling plan with National Bank Of Pakistan the current ratio of the company will significantly improve. Further, the accumulated losses of the company has now been recovered and during the quarter under review the un appropriated profit of the company is Rs million. In view of stated significant operational and financial improvements, these accounts have been prepared on going concern basis. For and on behalf of the Board of Directors Lahore October 28, 2013 MUSSAID HANIF

5 EQUITY AND LIABILITIES SHARE CAPITAL Note Un-audited September 30, 2013 Audited June 30, 2013 Authorized share capital 62,500,000 (2013: 62,500,000) ordinary shares of Rs. 10 each 625,000, ,000,000 Issued, subscribed and paid-up share capital 59,428,729 (2013: 59,428,729) ordinary shares of Rs. 10 each 594,287, ,287,290 UNAPPROPRIATED PROFIT/ACCUMULATED (LOSS) 9,182,283 (31,340,506) 603,469, ,946,784 SURPLUS ON REVALUATION OF PROPERTY, PLANT & EQUIPMENT 435,874, ,216,271 LONG TERM LOANS 262,074, ,644,260 DEFERRED LIABILITIES 241,259, ,895,115 CURRENT LIABILITIES Short term finances - secured 962,833, ,810,392 Current portion of long term liabilities 401,490, ,573,971 Creditors, accrued and other liabilities 369,997, ,335,226 Accrued mark up 222,797, ,695,886 1,957,118,263 1,836,415,475 CONTIGENCIES AND COMMITMENTS ASSETS 3,499,796,660 3,420,117,905 NON CURRENT ASSETS Property plant & equipment 5 2,043,770,995 2,013,545,943 Capital work in progress - 58,839,841 2,043,770,995 2,072,385,784 Long term advances and deposits 3,421,670 3,299,170 CURRENT ASSETS Stores, spares and loose tools 95,217, ,104,138 Stock in trade 777,350, ,156,815 Trade debts 332,259, ,322,119 Loans and advances 45,552,626 43,623,353 Trade deposits, prepayments and other receivables 128,111, ,947,120 Short term investment 534,104 40,311,825 Cash and bank balances 73,578,082 42,967,581 1,452,603,994 1,344,432,951 3,499,796,660 3,420,117,905 The annexed notes 1 to 8 form an integral part of these condensed interim financial statements. Director

6 Un-audited Jul-Sept 2013 Un-audited Jul-Sept 2012 SALES 939,722, ,768,598 COST OF SALES 833,631, ,446,180 GROSS PROFIT 106,091,448 72,322,418 OPERATING EXPENSES Distribution costs 16,496,711 15,516,047 Administrative 10,876,680 10,889,694 27,373,391 26,405,741 78,718,057 45,916,677 Other operating expenses 572, ,327 78,145,572 45,159,350 OTHER OPERATING INCOME/(LOSS) (87,372) 1,794,052 OPERATING PROFIT 78,058,200 46,953,402 FINANCE COSTS 51,735,267 36,455,846 PROFIT BEFORE TAXATION 26,322,934 10,497,556 TAXATION 1,142,268 2,217,448 PROFIT AFTER TAXATION 25,180,666 8,280,108 EARNING PER SHARE-BASIC & DILUTED The annexed notes 1 to 8 form an integral part of these condensed interim financial statements. Director

7 Un-audited Jul-Sept 2013 Un-audited Jul-Sept 2012 Profit for the period after taxation 25,180,666 8,280,108 OTHER COMPREHENSIVE INCOME: Other comprehensive income / (loss) for the period - - Total comprehensive income / (loss) for the period 25,180,666 8,280,108 The annexed notes 1 to 8 form an integral part of these condensed interim financial statements. Director

8 CASH FLOW FROM OPERATING ACTIVITIES Un-audited Jul-Sept 2013 Un-audited Jul-Sept 2012 Profit for the period before taxation 26,322,934 10,497,557 Adjustments for: Depreciation 40,835,936 35,425,328 Gain on sale of fixed assets (106,596) - Gain on re-measurement of short term investments (1,027) (413,431) Dividends, capital gains & other (income)/loss 512, ,327 Provision for staff gratuity 2,647,410 3,209,163 Financial charges 51,735,267 36,455,846 95,623,864 74,792, ,946,798 85,289,790 (Increase)/Decrease in current assets Stores, spares and loose tools 9,887,017 3,500,487 Stock in trade (107,194,149) 7,600,136 Trade debts (2,937,068) (85,289,701) Loans and advances (1,929,273) 5,501,148 Trade deposits, prepayments & other receivables (17,244,742) 4,398,266 (119,418,216) (64,289,664) Increase in current liabilities Creditors, accrued and other liabilities 101,502,423 10,141,515 Cash flow from operations 104,031,006 31,141,641 Financial charges paid (24,902,248) (18,455,431) Taxes paid (7,323,458) (2,806,656) Gratuity paid (1,391,000) (886,200) (33,616,706) (22,148,287) Net cash flow from operating activities ( A ) 70,414,300 8,993,354 CASH FLOW FROM INVESTING ACTIVITIES Long term advances, deposits and deferred costs (122,500) - Sale proceeds of fixed assets 150,000 - Dividends recieved 83,547 - Sale proceeds of short term investment 39,777,721 53,499,929 Fixed capital expenditure (12,264,554) (710,299) Net cash flow from investing activities ( B ) 27,624,214 52,789,630 CASH FLOW FROM FINANCING ACTIVITIES Short term finances - secured Long term finances - secrued (977,387) (66,450,626) (4,847,587) (40,428,173) Net cash flow from financing activities ( C ) (67,428,013) (45,275,761) NET INCREASE IN CASH AND CASH EQUIVALENTS ( A+B+C ) 30,610,501 16,507,223 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 42,967,581 11,842,941 CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 73,578,082 28,350,164 The annexed notes 1 to 8 form an integral part of these condensed interim financial statements. Director

9 Description Paid Up Capital Unappropriated Profit Total Balance as at June 30, ,287,290 (165,553,829) 428,733,461 Net Profit for the period - 8,280,108 8,280,108 Current year incremental depreciation - net of tax - 3,955,301 3,955,301 Balance as at September 30, ,287,290 (153,318,420) 440,968,870 Balance as at June 30, ,287,290 (31,340,506) 562,946,784 Net Profit for the period - 25,180,666 25,180,666 Current year incremental depreciation - net of tax - 15,342,123 15,342,123 Balance as at September 30, ,287,290 9,182, ,469,573 The annexed notes 1 to 8 form an integral part of these condensed interim financial statements. Director

10 1. These financial statements have been prepared in accordance wih the requirements of International Accounting Standard (IAS) 34 "Interim Financial Reporting". 2. These financial statements are un-audited and are being submitted to shareholders as required by Section 245 of the Companies Ordinance, The accounting policies adopted for the prepartion of the accounts are the same as those applied in the prepartion of the preceding annual published financial statements of the company for the year ended June 30, Contigencies and Comitments 4.1 Commitments Commitments against irrevocable letters of credit for import of machinery and raw material as at September 30, 2013 amounting to Rs million (June 2013: Rs million). 4.2 Others There are no other significant activities since June 30, 2013 affecting financial Statements. 5. Following is the cost of fixed assets that have been added / disposed off during the quarter ended: Additions in fixed assets 71,104,395 58,815,781 Deletions in fixed assets 591,054 3,071,660 Additions in capital work in Progress 10,667,901 94,127,202 Transfers from capital work in Progress 69,507,742 35,287, EARNING PER SHARE - BASIC Profit after tax 25,180, ,260,897 Weighted average number of ordinary shares 59,428,729 59,428,729 Earning per share - basic DATE OF AUTHORISATION These accounts have been approved by Board of Dirctors on October 28, COMPARATIVE FIGURES Have been rearranged / reclassified wherever necessary for the purpose of comparison. Have been rounded off to the nearest rupee. Un-audited Sept 30, 2013 Audited June 30, 2013 Director

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Zephyr Textiles Limited

Zephyr Textiles Limited Accounts For The Nine Months Ended March 31, 2017 Contents Company Information 02 Directors Report 03 Balance Sheet 04 Profit and loss Account 05 Statement of Comprehensive Income